Random thought on Socializm

[The Question]

The choice to vest control of the means of production fro any sector of the economy is a big deal and should never be done for ideological reasons (nor rejected for ideological reasons). If it can work better, then do it. If it can't, don't. But the proof of concept for certain medical systems and public works is in and they work.

All right, so it occasionally does work out as promised. But as you also noted, as often as not, it doesn't. Here's the biggest ideological yet logically founded reason why it should be resisted -- if it doesn't work as promised, how do you get that control away from the state?

And by the way, all control of the means of production is always with the collective -- the difference is whether that collective is the marketplace or the government, and of the two, the marketplace is the more representative of the will of the people.

 

[Diane]

All right, so it occasionally does work out as promised. But as you also noted, as often as not, it doesn't.

Yes, in just about the same frequency as we find problems in capitalist corporations.

Here's the biggest ideological yet logically founded reason why it should be resisted -- if it doesn't work as promised, how do you get that control away from the state?

Well, for the most part, our governmental system, at least in my experience, is more sensitive to the voters. (It goes through phases.) Governments in Canada tend to subsidise Crown corporations that are not working so well, if there is a critical niche it fills in the economy. Otherwise, it just sells it off. If that isn't happening, we have a little thing here in Canada that we use every 5 years wether we need to or not. It's called a General Election. There's always a party that would be happy to privatise that particular Crown corporation for you, if enough people think that things are not working well enough.

And by the way, all control of the means of production is always with the collective -- the difference is whether that collective is the marketplace or the government, and of the two, the marketplace is the more representative of the will of the people.

Please, do not insult my intelligence. The State is everyone who has the franchise. The market (the customer) does not control corporations; the shareholders do. The economies of developed nations are so complex that the 1950's style cartoon conceptions of how capitalism works is far outdated. The main reason that the recovery in the US is jobless is that workers are scared shitless of losing the crappy job they have, so when the economy recovers, the shareholders enjoy some excellent dividends. Keep them happy, you have a happy board, you keep your job as CEO. But that's a function of something completely different than
the difference between economic systems.

 

[Marquis De Sade]

The market (the customer) does not control corporations; the shareholders do.

Do they ?

 

[The Question]

Please, do not insult my intelligence. The State is everyone who has the franchise. The market (the customer) does not control corporations

Ah, I see what you did there. You redefined "the market" from collective to individual. Naughty, naughty. None of the sleight of hand. Other least favorite thing about Socialism, it can never be argued without these kinds of tricks.

the shareholders do.

Right, and what is it they want most? To turn a profit. When the market -- that is, collectively, all customers, grows sufficiently dissatisfied with the product or service that corporation provides, they'll turn their spending power to the competition, and those shareholders see a decrease, plateau or loss of profits. They don't want that. Therefore, they give the market what (they believe) it wants. Without such competition, the state has no such incentive.

 

[Marquis De Sade]

The shareholders are powerless. It's the CEO's and fat cats of Wall Street that run the show. It's the financial sphere that is taking over the real (activity) sphere in terms of corporate decision making.

You guys are so disconnected from reality.

 

[Classic_Forever]

If they are born in sin and that much trouble, why are you forcing them to play nice, and wouldn't it be better to just do away with them entirely?

Like, if a hot chick were born in sin and that much trouble, would she just be like a one-night stand thing?



Wow I'm like a total virgin here:bathbaby:

 

[Diane]

The shareholders are powerless. It's the CEO's and fat cats of Wall Street that run the show. It's the financial sphere that is taking over the real (activity) sphere in terms of corporate decision making.

You guys are so disconnected from reality.

Who in hell do you think the shareholders are? These guys all work for each other with respect to stock options, Board appointments, and the like.

You are spot on with the observation, but missed the part where the major financial and manufacturing leaders are engaged in a massive circle-jerk.

It's a New Feudalism and guess who the serfs are?

 

[Diane]

Ah, I see what you did there. You redefined "the market" from collective to individual. Naughty, naughty. None of the sleight of hand. Other least favorite thing about Socialism, it can never be argued without these kinds of tricks.

No, no. Just read 'the customer' as plural, like 'the State'.

Right, and what is it they want most? To turn a profit. When the market -- that is, collectively, all customers, grows sufficiently dissatisfied with the product or service that corporation provides, they'll turn their spending power to the competition, and those shareholders see a decrease, plateau or loss of profits. They don't want that. Therefore, they give the market what (they believe) it wants. Without such competition, the state has no such incentive.

That's the theory. But as we see, it just doesn't work out like that. US Health Insurance companies are a great example.

Monopolies indeed do not have such a motivation, but they can have other motivations. Just as a police officer can be motivated by wanting to slap people around, he or she can be motivated by wanting to help people, keep society safe, or just make a paycheque.

Even Adam Smith didn't think that the only (or even the most important) motivation in business was profit. But that seems to be how it is being interpreted in the US these days.

 

[The Question]

Even Adam Smith didn't think that the only (or even the most important) motivation in business was profit. But that seems to be how it is being interpreted in the US these days.

Well, this is where Socialism and leftist ideologies in general fail to take one major thing into account -- people are motivated by personal (and usually instant or near-future) gratification more strongly than by abstracts from which they personally derive no demonstrable benefit. Witness major financial institutions run into the ground, bailed out on the taxpayers' backs and then... turning around and paying out bonuses to executives. The same ones that ran the institutions into the ground. Same ones who asked for bailouts. So yeah -- personal profit is exactly what motivates these people, and our economy is still reeling from the proof. But that proof is also proof of why small management of huge businesses (and what is a government but a huge business) is destined to crumble under ineptitude and corruption, unless it's bolstered by a yet larger business. Both of these entities lack accountability to those who use them, and without accountability there is no significant exterior incentive for responsibility.

Now, yes, as in the example you mentioned of the police officer -- they may choose to behave with integrity -- or they may not. But if they don't, in a Socialist system, those who once merely permitted them to exercise authority have little or no recourse in which to remove them from that authority.

 

[Diane]

Well, this is where Socialism and leftist ideologies in general fail to take one major thing into account -- people are motivated by personal (and usually instant or near-future) gratification more strongly than by abstracts from which they personally derive no demonstrable benefit.

Unless they aren't. The fact remains that a lot of state owned corporations work perfectly well and compete successfully with the privately held companies that compete with them.

You could say the same sort of thing with respect to the criminal law. Being protected by the deterrent effect of an effective criminal justice system doesn't seem as attractive to some people than the near-future gratification of stealing that shiny object over there. I hardly think that you think that the entire criminal justice system is thus worthless.

Witness major financial institutions run into the ground, bailed out on the taxpayers' backs and then... turning around and paying out bonuses to executives. The same ones that ran the institutions into the ground. Same ones who asked for bailouts. So yeah -- personal profit is exactly what motivates these people, and our economy is still reeling from the proof. But that proof is also proof of why small management of huge businesses (and what is a government but a huge business) is destined to crumble under ineptitude and corruption, unless it's bolstered by a yet larger business. Both of these entities lack accountability to those who use them, and without accountability there is no significant exterior incentive for responsibility.

Well, now. A State owned corporation is responsible to the Government of the day which is in turn responsible to the electorate. Any complaint you have about {privately|publicly} owned corporations can be levelled at the other.

Now, yes, as in the example you mentioned of the police officer -- they may choose to behave with integrity -- or they may not. But if they don't, in a Socialist system, those who once merely permitted them to exercise authority have little or no recourse in which to remove them from that authority.

Again, in *everything* you say above, you are confusing 'socialist' with 'totalitarianism'. Canadians, Brits, and Europeans of all stripes have social democratic parties which have held power, increased state ownership of certain sectors of the economy when they though it a good idea and expanded private ownership of those sectors when it was felt good idea. No problems. Socialism ≠ totalitarianism. Socialism is perfectly compatible with representative democracy. Mix and match as you like.

 

[Aquehonga]

[random] is a disciple of 19th Century socialist pioneer Robert Owen.

 

[Weevil]

Well, the Health Care system in Canada is socialised to a very large degree. The state owns most of the hospitals and the physicians are private contractors.

We have more people coming to Canada to have medical procedures than Canada has going south primarily because the level of care is slightly better, it is cheaper, we have better outcomes in general, no one goes into bankruptcy for the treatment for illness or injury.

The marginal tax rate (both industrial and individual) is just a bit higher than in the US; it's affordable. I saw a study that somewhere around 17% of a average US citizen is dedicated to health care. Less than 8% of the average salary in Canada funds health care.

That's one.

I wouldn't use the system in the States as an example of Capitalism in medical care. Maybe the Canadian system doesn't needlessly drain as many resources as the one in the US. By needlessly drain I mean the myriad of middlemen, who produce nothing, that get between the doctor and the patient.

Everyone has a cell phone these days thanks to the free market and the incentive for companies to produce the best product for the lowest price (I like to compare it to evolution). Why hasn't this occurred in medicine?

If I were a medical genius I would try my best to undercut any competitor and similarly deliver the best treatment for the lowest price. Unfortunately, that wouldn't be possible today because I'd probably get fined and go to prison. In a saner society I could provide my service and not bankrupt people.

But what if there is no FDA, and the Chinese can poison us legally? What if I were a crackpot holistic healer or shaman from a tropical island who knew nothing about medicine but advertised my services as the best in the land? Well, I would be violating a contract by not actually helping people and for that I would be punished. There is no overseer, who dictates terms and skims off the top while providing essentially nothing, necessary from my point of view.

The wind generation industry in Denmark was mentioned in the thread.

South Africa has a number of very profitable state owned enterprises.

PetroCanada was a Canadian Crown Corporation that was very profitable in the 70s and eraly 80s in Canada. It was privatized by ideologues.

Manitoba Telecom Systems was a Manitoba Crown Corporation that was very profitable until privatised by ideologues. The company became a terrible service provider that has lost many customers.

I could go on, but I don't want to give anyone the impression that I think that any sector or enterprise be State owned without very good reason, but to exclude it on ideological grounds is cutting your nose off to spite your face.

It's not only excluded on the ideological ground. I'll provide an example used by one Tom Woods.


In fact I'll just quote him. A little extra has been added to establish a context.

"First of all, remember that what the government's going to spend this on is money-losing. They are projects that will make losses. Why do I say that? Well, the private sector would already be doing them if they were money-making ventures. These are money-losing ventures, that's why the government is doing them. And of course the government, because it gets its revenue not by selling you a product (it gets its revenue by seizing it from you,) it has no way to calculate profit and loss. Is it producing something that's adding value, is it producing something that's destroying value? It has no way of knowing. Every spending decision it makes is totally arbitrary because it's completely isolated from market exchange."

--

"Just to take one example from the stimulus package, apparently two million Americans are going to get their homes 'weatherized' under the stimulus package. Now this is supposed to, again, stimulate idle resources back into activity. "Well, OK, so we've got some resources in the financial sector which are idle, we've got some car production that's idle, we've got a lot of various types of unemployment. Do we have enough unemployed weatherizers in the country that a stimulus package could put them and only them back to work?"

Well of course not. What in fact will happen is that you'll be drawing employment from private employers who were producing good things for consumers, but now, they'll be bit away from private actors. And in fact when the economy starts turning around private actors will find themselves having to bid against the government for laborers, laborers who are doing things that aren't even in demand.

So there's no way, even if any of this stuff made sense, to 'tailor the package' so that exactly the kinds of capital and kinds of employment are specifically drawn back into use. Even if the theoretical objections weren't there, the practical obstacles are impossible to meet, in effect.

And let's say there were two million weatherizers out of work, let's say it's one weatherizer per house, and there were two million people needing their homes weatherized. Then why do we need the stimulus package? If wages and prices are allowed to fall to their equilibrium level then people who need their homes weatherized will find the weatherizing services they need on their own, and so the stimulus is superfluous.

--

Too long; didn't read version:

The government can't know what is profitable because of moral hazard. If it were profitable, the private sector would be doing it already. Government ventures don't make money when you take into account how many resources have been taken from the market in order to fund their inherently wasteful projects.

 

[Diane]

Too long; didn't read version:

The government can't know what is profitable because of moral hazard. If it were profitable, the private sector would be doing it already. Government ventures don't make money when you take into account how many resources have been taken from the market in order to fund their inherently wasteful projects.

Much of what you have said is downright correct for a large number of cases.

Of course, some money losing endeavours can be worth the cost (providing postal service to the Far North, for example) for a number of non-monetary reasons.

Also, you seem to think that the private sector is all pervasive and if there's money to be made, they are in there both feet. Well, I am uncertain of that. A Nation State can absorb a lot more risk than can a private consortium of capital. It's the reason private enterprise never wants to compete with governments unless there is some guaranteed prior restraint to what reserves the nation State can draw from. So there might be some endeavours that simply require the capital and ability to absorb a loss that a Nation State can provide. Besides, I am not so sure that capital is spread around evenly enough to ensure that personal preferences do not interfere with what is being invested in.

There is also the matter of trust. There are a number of countries whose governments I would not trust to keep me warm if I set them on fire. The US government is one; I hope that strikes no one as offensive, but look at the influence of dump trucks full of money. Some other countries have better traditions.

On the other hand, there are companies I trust and those I do not as well. Basically I am arguing for a case by case evaluation. Blindly trusting the Free Market to give you a reach around is as naive as blindly trusting an elected official to vote his conscience.

 

[Lilac]

Of course, some money losing endeavours can be worth the cost (providing postal service to the Far North, for example) for a number of non-monetary reasons.

Tangential argument: The high costs of transporting goods, including post, makes a good argument for all-weather roads up north, particularly the northern extension of the Mackenzie Highway. On the other hand, do the costs of building the highway in the first place justify the need for the highway? Winter roads are a fascinating topic for me, and currently, they are the only overland means to get into Nunavut (Yellowknife to the Jericho Diamond Mines), though I've seen plans to build a highway into Nunavut from Manitoba along Hudson Bay.

I imagine it'd be easier to build a permanent road to access the remote northern settlements (and I see the biggest 'need' along the Mackenzie River Valley all the way to Inuvik) than to fly everything in during the summer and drive in the winter, but do the provincial governments and their far larger population base see it this way?

 

[Weevil]

Much of what you have said is downright correct for a large number of cases.

Of course, some money losing endeavours can be worth the cost (providing postal service to the Far North, for example) for a number of non-monetary reasons.

Is it moral for me to petition the government to take your money to subsidize my wasteful behavior? If I lived next to an area which experiences flooding several times a year, why should I make society poorer by being compensated somehow? That would be the ideological argument.

The economic argument would go something like... A private entity could provide that service at a price set in the market, in a less wasteful fashion, provided there existed some competition.

Also, you seem to think that the private sector is all pervasive and if there's money to be made, they are in there both feet. Well, I am uncertain of that. A Nation State can absorb a lot more risk than can a private consortium of capital. It's the reason private enterprise never wants to compete with governments unless there is some guaranteed prior restraint to what reserves the nation State can draw from. So there might be some endeavours that simply require the capital and ability to absorb a loss that a Nation State can provide. Besides, I am not so sure that capital is spread around evenly enough to ensure that personal preferences do not interfere with what is being invested in.

There is also the matter of trust. There are a number of countries whose governments I would not trust to keep me warm if I set them on fire. The US government is one; I hope that strikes no one as offensive, but look at the influence of dump trucks full of money. Some other countries have better traditions.

On the other hand, there are companies I trust and those I do not as well. Basically I am arguing for a case by case evaluation. Blindly trusting the Free Market to give you a reach around is as naive as blindly trusting an elected official to vote his conscience.

Woods can provide a better primer and express the counterarguments more eloquently than I can. These are long, but interesting videos which are not meant to substitute my response, but could sum them up with more clarity, in case you or anyone else is interested.

Why You've Never Heard of the Great Depression of 1920
[YOUTUBE]czcUmnsprQI[/YOUTUBE]


Applying Economics to American History
[YOUTUBE]m-LJ3wZjD4I[/YOUTUBE]

 

[jack]

That's not a serious proposition (in this post,) but picture a species like the Orcs from LoTR in a little orc city, being beaten into holding hands and picking flowers for each other. How is it desirable? It's fundamentally repulsive to me somehow, like some parody of true good will, generosity etc.

That loosely translates more into fascism, at least to me.

Socialism is interesting. Our guy Bernie Sanders (for example) is an "avowed Socialist" yet is often the ONLY true Democratic voice of the party, and he's an Independent.

Medical care would be OK to "socialize" IMO. Freaking medical establishment is much more corrupt and pervasive than say the Tobacco Industry was.

But your point is well taken. Enforced behavior sucks.

 

[Marquis De Sade]

 

[The Question]

That's not a serious proposition (in this post,) but picture a species like the Orcs from LoTR in a little orc city, being beaten into holding hands and picking flowers for each other. How is it desirable? It's fundamentally repulsive to me somehow, like some parody of true good will, generosity etc.

That loosely translates more into fascism, at least to me.

Socialism is interesting. Our guy Bernie Sanders (for example) is an "avowed Socialist" yet is often the ONLY true Democratic voice of the party, and he's an Independent.

Medical care would be OK to "socialize" IMO. Freaking medical establishment is much more corrupt and pervasive than say the Tobacco Industry was.

But your point is well taken. Enforced behavior sucks.

The only real difference between socialism and totalitarianism is that socialism is the face it wears before people resist it.

 

[Diane]

The only real difference between socialism and totalitarianism is that socialism is the face it wears before people resist it.

Except in all contemporary Western Social Democratic countries where the State owns some of the means of production and has changed means ownership peacefully and democratically many times.

 

[The Question]

Except in all contemporary Western Social Democratic countries where the State owns some of the means of production and has changed means ownership peacefully and democratically many times.

So you totally missed the "before people resist it" part, then? Should I have bolded that?